The fastest way to make a tax problem worse is to try to make the evidence go away. Section 7212(a) of the Internal Revenue Code is why. It makes it a crime to corruptly obstruct or impede the administration of the tax laws, and its catch-all language, called the omnibus clause, has been used in a wide range of cases.
In 2018, the Supreme Court narrowed that clause. This guide explains the statute, what the Court held, and why the narrowing does not help someone who is already under audit or investigation. It is general information, not advice for any situation.
The statute
IRC 7212(a) has two parts. The first targets specific people: whoever "corruptly or by force or threats of force (including any threatening letter or communication) endeavors to intimidate or impede any officer or employee of the United States acting in an official capacity under this title."
The second is the omnibus clause: whoever "in any other way corruptly or by force or threats of force (including any threatening letter or communication) obstructs or impedes, or endeavors to obstruct or impede, the due administration of this title."
The penalty for either is a fine of not more than $5,000, imprisonment of not more than 3 years, or both. If the offense is committed only by threats of force, the maximum is a $3,000 fine and 1 year. The statute defines "threats of force" as threats of bodily harm to the officer or employee or a member of their family. Under 18 U.S.C. 3571, a felony fine for an individual can reach the greatest of the statutory amount, $250,000, or an alternative amount based on gain or loss.
The IRS summary in Exhibit 25.1.1-1 lists the omnibus clause elements as a corrupt effort, endeavor, or attempt; to impede, obstruct, or interfere with; the due administration of Title 26.
Subsection (b), a separate offense, covers forcible rescue of property after it has been seized.
Marinello v. United States
In Marinello v. United States, 584 U.S. 1 (2018), the Supreme Court considered how far the omnibus clause reaches. The Second Circuit had held that it did not require the government to show that the defendant tried to interfere with a pending IRS proceeding. The Supreme Court reversed.
The Court held that to convict under the omnibus clause, the government must prove the defendant was aware of a pending tax-related proceeding, "such as a particular investigation or audit," or could reasonably foresee that such a proceeding would commence. The government must show a nexus between the obstructive conduct and that proceeding, and that the proceeding was pending at the time or, at least, reasonably foreseeable by the defendant.
The Court explained that the clause does not cover "every violation that interferes with routine administrative procedures such as the processing of tax returns, receipt of tax payments, or issuance of tax refunds." In the Court's words, "it is not enough for the Government to claim that the defendant knew the IRS may catch on to his unlawful scheme eventually." Using a maritime analogy, the Court said "the proceeding must at least be in the offing."
Why Marinello does not help after IRS contact
Marinello narrowed the statute for conduct with no connection to any particular proceeding. It did the opposite of help for anyone who has already received an audit letter, met a revenue officer, or been visited by special agents. In those situations, a "particular investigation or audit" is not hypothetical. It is the reason you are reading this.
That is why the most dangerous time for obstruction exposure is right after first contact. People panic. They delete files, ask a bookkeeper to "clean up" ledgers, backdate documents, or ask a relative to say something that is not true. Each of those acts can connect directly to a known proceeding.
Obstruction as a badge of fraud
Even when obstruction is not charged, it is evidence. The IRS fraud manual lists, as indicators of fraud based on the taxpayer's conduct in IRM 25.1.2.3:
- an attempt to hinder or obstruct the examination, with examples including failure to answer questions, repeated cancelled or rescheduled appointments, refusal to provide records, and threatening potential witnesses, including the examiner;
- destruction of books and records, especially if just after the examination was started;
- backdated applications and related documents;
- submission of a false affidavit.
IRM 25.1.6.4 lists obstructive actions, including false statements, destruction of records, transfer of assets, failure to cooperate with the examiner, and concealment of assets, among the badges courts focus on in civil fraud cases. See badges of fraud.
Declining to talk is not obstruction
There is an important difference between exercising a right and obstructing. Declining to answer a special agent's questions is a constitutional right that the agents themselves are directed to explain in IRM 9.4.5. Having a lawyer deal with the IRS on your behalf is not obstruction. Asserting legal positions in good faith is not obstruction.
Lying, destroying records, hiding assets from collection, intimidating witnesses, and threatening IRS employees are different. See your rights in an IRS criminal interview.
Summonses and subpoenas: produce, do not purge
Obstruction risk peaks when the government asks for records. In a civil examination, IRC 7602(a) authorizes the IRS to examine books and records and to summon the taxpayer and others to produce records and give testimony. In a grand jury investigation, subpoenas can require production of books, papers, and documents, as IRM 9.5.2.5.1.1.2 describes.
A request for records is the moment a proceeding is unmistakably pending. Responding to it is a job for counsel. Lawyers can raise legitimate objections, negotiate scope, and assert privileges that apply. What nobody can do is alter or destroy what was requested.
Related statutes
Obstruction in a tax case can be charged under more than one statute. Knowingly and willfully making a materially false statement to a federal agency can be charged under 18 U.S.C. 1001. Section 7206(4) of the Code makes it a felony to remove, deposit, or conceal property on which a levy is authorized with intent to evade or defeat assessment or collection. Section 7206(5) makes it a felony to willfully conceal property or falsify records in connection with an offer in compromise or closing agreement.
Who prosecutes it
Under JM 6-4.200, the Justice Department's Tax Division has responsibility for criminal proceedings arising under the internal revenue laws, with listed exceptions. One exception is corrupt or forcible interference with an IRS officer or employee under section 7212(a), "but not the 'omnibus clause.'" Omnibus clause cases stay with the tax prosecutors.
Statute of limitations
IRC 6531(6) applies a 6-year limitations period to the offense described in section 7212(a), relating to intimidation of officers and employees of the United States. See the criminal tax statute of limitations.
The practical rule
Once the IRS has contacted you, preserve everything. Do not alter, discard, or "organize" records in a way that changes them. Do not coach anyone about what to say. Do not move assets to keep them away from the government. If you are not sure whether something you are about to do could be seen as obstruction, that uncertainty is your answer: ask a lawyer first. If you are in an eggshell audit, this rule matters more than any other. And if someone else, a partner, a relative, or an employee, asks you to help make records disappear or to tell a story that is not true, decline and tell your lawyer. The IRS lists threatening potential witnesses among the conduct it treats as obstruction of an examination.
Section 7212(b) adds a separate offense for forcibly rescuing, or attempting to rescue, property after it has been seized, with a fine of not more than $500 or double the value of the property, whichever is greater, or imprisonment of not more than 2 years.
Frequently asked questions
What did Marinello v. United States decide?
The Supreme Court held in 2018 that a conviction under the omnibus clause of IRC 7212(a) requires proof that the defendant was aware of a pending tax-related proceeding, such as a particular investigation or audit, or could reasonably foresee one, with a nexus between the conduct and that proceeding.
Is shredding old tax records illegal?
Context matters. Under Marinello, the omnibus clause requires a connection to a pending or reasonably foreseeable proceeding. Once an audit or investigation is pending, destroying records can support an obstruction charge and is listed by the IRS as an indicator of fraud.
Is refusing to talk to a special agent obstruction?
No. The Fifth Amendment protects the right not to answer questions that may incriminate you, and IRS special agents are directed to tell subjects about that right. Lying or destroying evidence is different.
What is the penalty for obstruction under 7212(a)?
A fine of not more than $5,000, imprisonment of not more than 3 years, or both, with lower maximums if the offense is committed only by threats of force. 18 U.S.C. 3571 can allow a higher fine for felonies.
General information only, not legal advice. Reading this page does not create an attorney-client relationship. Laws and IRS procedures change; the sources cited were reviewed on the date shown above.